China Ritar Power Announces Second Quarter Fiscal 2010 Results

SHENZHEN, China, Aug. 16 /PRNewswire-Asia-FirstCall/ -- China Ritar Power Corp. (Nasdaq: CRTP) ("China Ritar" or the "Company"), a leading Chinese manufacturer of innovative nano gel and environmentally friendly batteries, today announced its financial results for the second quarter of fiscal year 2010 ended on June 30, 2010.

    Second Quarter Highlights
    -- Revenue increased 57% year-over-year to $33.6 million
    -- Domestic and international sales accounted for 32% and 68%,
       respectively, of total revenue
    -- Gross profit increased 34% year-over-year to $5.5 million
    -- Net income increased 27% year-over-year to $2.3 million
    -- Fully diluted earnings per share were $0.10, up from $0.09 in second
       quarter 2009



"We are pleased with our financial results for the quarter. Our growth is the result of continued demand for our lead acid batteries resulting in revenue from domestic and international markets increasing 104% and 41%, respectively," Mr. Jiada Hu, China Ritar's Chairman and Chief Executive Director commented.

Revenue was $33.6 million for the second quarter of 2010, up 57% from revenue of $21.4 million in the second quarter of 2009. This increase in revenue was due to an increase in sales volume of 42% and a 10% increase in the Company's average selling price (ASP). Batteries used for Telecom, alternative energy, UPS and light electronic vehicles (LEV) markets accounted for 25%, 26%, 41% and 8% of total sales of the second quarter of 2010, respectively. International sales represented 68% of total sales with domestic sales representing the balance of 32%.

Gross profit for the quarter increased 35% to $5.5 million from $4.1 million in the same period of 2009. Gross margin for second quarter of 2010 was 16.4% compared to 19.0% in the second quarter of 2009.

Operating expenses were $2.2 million or 6.7% of sales, compared to $1.6 million or 7.5% of sales in the second quarter of 2009.

Operating income for the second quarter was $3.3 million compared to $2.5 million in the second quarter of 2009.

Net income was $2.3 million in the second quarter of 2010, up 27% from $1.8 million in net income from the same period a year ago. Fully diluted earnings per share were $0.10 compared to fully diluted earnings per share of $0.09 in the second quarter of 2009.

Financial Condition

As of June 30, 2010, China Ritar had $14.6 million in cash and equivalents and restricted cash, $44.5 million in working capital and $39.7 million in total liabilities. Shareholders' equity stood at $59.8 million, up from $55.4 million at year end 2009.

Business Outlook

China Ritar Power has been granted a new industrial park by the Hengyang government. The industrial park will be completed during the forth quarter of 2010 and the Company expects to begin installing equipment in the forth quarter of the year. Total number of production lines will increase from 19 to 29.

"We are upbeat on the outlook for 2010 as opportunities in our target niche markets remain robust," commented Mr. Hu. "We have been approved as a qualified supplier for China Unicom and China Mobile and expect to be approved by China Telecom this year."

Conference Call

China Ritar will host a conference call at 8:30 am EDT on Monday, August 16, 2010 to discuss the 2010 second quarter results. To participate in the conference call, please dial the following number fifteen minutes prior to the scheduled conference call time: 866 839 8029. International callers should dial +852 2598 7556 or 10800 6400 091, 10800 2640 090 in China . The pass code for the call is 1083226. If you are unable to participate in the call at this time, a replay will be available on Monday, August 16, 2010 at 11:00 AM ET through Monday, August 23, 2010. To access the replay, dial 866 820 8960, international callers should dial +852 3018 0000 or 800 876 8083 in China. The conference pass code is 1083226. This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://ir.ritarpower.com/en/ . Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a 90- day replay will be available shortly after the call by accessing the same link.

About China Ritar Corp.

China Ritar designs, develops, manufactures and markets environmentally friendly, lead acid batteries with a wide range of capacities and applications, including telecommunications, Uninterruptible Power Supply (UPS) devices, Light Electrical Vehicles (LEV), and alternative energy systems (solar and wind power). China Ritar sells, markets and services six series and 197 models of Ritar-branded, cadmium-free valve-regulated lead-acid (VRLA) batteries. Products are sold worldwide with sales in 81 countries including China, India, and numerous markets in Europe and the Americas. Additional information can be found at the Company's website http://www.ritarpower.com .

Safe Harbor Statement

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by China Ritar on its conference call in relation to this release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included herein are forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward- looking statements.

    For more information, please contact:

     Adam Jigang Sun
     Tel:   +86-139-1186-1878 (China)
     Email: sun@ritarpower.com

                          -FINANCIAL TABLES FOLLOW-



                   CHINA RITAR POWER CORP. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                          June 30                 December 31
                                            2010                      2009
                                        (Unaudited)
                     ASSETS
    Current assets:
    Cash and cash
     equivalents                          $9,500,664              $20,459,361
    Restricted cash                        5,104,315                5,900,649
    Accounts receivable, net
     of allowances of
     $1,121,447 and
     $1,115,321                           32,749,884               24,920,825
    Receivable from sale of
     a subsidiary                                 --                  417,387
    Due from a former
     subsidiary                            3,152,997                3,925,348
    Inventory                             22,201,193               19,484,224
    Advance to suppliers                   2,876,943                1,643,689
    Other current assets                   5,063,388                3,915,605
    Total current assets                  80,649,384               80,667,088

    Non-current assets:
    Property, plant and
     equipment, net                       16,793,774               16,248,551
    Construction in progress                  94,676                  136,443
    Intangible assets, net                     7,094                    9,407
    Land use right                           466,784                  468,265
    Rental and utility
     deposits                                379,299                   82,439
    Deposits for purchase of
     property, plant and
     equipment                             1,010,831                  833,760
    Deferred income tax
     assets                                  120,171                  115,064

    Total assets                         $99,522,013              $98,561,017

        LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
    Accounts payable                     $16,643,818              $16,658,868
    Income and other taxes
     payable                               6,402,807                3,986,935
    Accrued salaries                         537,623                  502,978
    Bills payable                          6,993,329               13,498,001
    Other current
     liabilities                           2,542,855                2,800,879
    Derivative instruments                    41,997                       --
    Current portion of long
     term loans                            1,349,846                1,342,473
    Short-term loans                       2,944,872                1,464,515
    Total current
     liabilities                          37,457,147               40,254,649

    Long-term loans                        2,226,140                2,881,188

    Total liabilities                     39,683,287               43,135,837

    Stockholders' equity:
    Preferred stock, $.001
     par value, 10,000,000
     shares authorized, none
     issued and outstanding                       --                       --
    Common stock at $.001
     par value; authorized
     100,000,000 shares
     authorized, 21,858,925
     and 21,450,238 shares
     issued and outstanding                   21,859                   21,450
    Additional paid-in
     capital                              31,721,124               31,461,723
    Retained earnings                     24,607,083               20,745,985
    Accumulated other
     comprehensive income                  3,488,660                3,196,022

    Total stockholders'
     equity                               59,838,726               55,425,180

    Total liabilities and
     stockholders' equity                $99,522,013              $98,561,017



                   CHINA RITAR POWER CORP. AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                 (UNAUDITED)

                          Six months ended June 30, Three months ended June 30,
                               2010          2009        2010          2009
    CONTINUING OPERATIONS
    Net revenue             $58,362,748  $37,781,035  $33,554,388  $21,397,374
    Cost of sales            48,100,168   30,424,848   28,062,204   17,333,703
    Gross profit             10,262,580    7,356,187    5,492,184    4,063,671

    Operating expenses:
    Salaries                  1,136,573      853,334      570,731      458,441
    Sales commission            791,834      926,582      260,283      177,358
    Shipping and handling
     cost                       675,840      507,477      390,580      225,531
    Other selling and
     administrative expenses  2,173,899    1,664,038    1,015,257      740,962
                              4,778,146    3,951,431    2,236,851    1,602,292

    Operating profit          5,484,434    3,404,756    3,255,333    2,461,379

    Other income and
     (expenses):
    Interest income              62,815       65,849       17,988        8,200
    Other income                  6,402        3,277        6,402          737
    Interest expenses          (286,574)    (313,494)    (138,415)    (166,070)
    Foreign currency exchange
     (loss) gain               (242,020)       5,089     (175,126)      54,405
    Other expenses               (3,051)      (1,664)        (302)          (1)

    Other expenses, net        (462,428)    (240,943)    (289,453)    (102,729)

    Income from continuing
     operations before income
     taxes                    5,022,006    3,163,813    2,965,880    2,358,650

    Income taxes             (1,160,908)    (528,479)    (689,928)    (411,432)

    Income from continuing
     operations               3,861,098    2,635,334    2,275,952    1,947,218

    DISCONTINUED OPERATIONS
     Loss from discontinued
     operations, net of taxes        --     (314,424)          --     (160,567)
    Net income                3,861,098    2,320,910    2,275,952    1,786,651
    Add: Loss from discontinued
     operations attributable to
     noncontrolling interest         --       15,722           --        8,028

    Net income attributable to
     China Ritar shareholders 3,861,098    2,336,632    2,275,952    1,794,679

    Other comprehensive income
     attributable to
     noncontrolling interest         --            3           --            3
    Foreign currency translation
     adjustment                 292,638      117,938      278,702       10,517
    Comprehensive income
     attributable to China
     Ritar shareholders      $4,153,736   $2,454,573   $2,554,654   $1,805,199
    Comprehensive loss (income)
     attributable to non-
     controlling interest            --     $(15,725)         $--      $(8,031)


     Comprehensive income    $4,153,736   $2,438,848   $2,554,654   $1,797,168

    Earnings per share
     attributable to China
     Ritar stockholders:

    Basic:
    - Income from continuing
     operations                   $0.18        $0.14        $0.10        $0.10
    - Income (loss) from
     discontinued operations         --        (0.02)          --        (0.01)
     - Net income                 $0.18        $0.12        $0.10        $0.10

    Diluted
    -Income from continuing
     operations                   $0.18        $0.14        $0.10        $0.10
    -Income (loss) from
     discontinued operations         --        (0.02)          --        (0.01)
     - Net income                 $0.18        $0.12        $0.10        $0.09

    Weighted average number of
     shares outstanding:
    - Basic                  21,787,179   19,134,992   21,787,179   19,134,992
    - Diluted                21,787,179   19,134,992   21,787,179   19,134,992



                   CHINA RITAR POWER CORP. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                For the Six Months Ended
                                                         June 30,
                                                  2010             2009

    Cash Flows from Continuing
     Operating Activities:
    Net income                                 $3,861,098      $2,320,910
    Loss from discontinued operations,
     net of taxes                                      --         314,424
    Income from continuing operations           3,861,098       2,635,334
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
    Deferred income tax assets                     (4,452)             --
    Depreciation of property, plant and
     equipment                                    760,166         562,453
    Amortization of intangible assets and
     land use right                                 6,384           6,377
    Loss (gain) on disposal of property,
     plant and equipment                              671            (365)
    Loss (gain) on derivative instruments          41,787         (23,005)
    Changes in operating working capital
     items:
    Accounts receivable                        (7,653,633)      3,204,540
    Inventory                                  (2,596,870)     (2,782,015)
    Advance to suppliers                       (1,303,755)        (83,226)
    Notes receivable                               11,761          (2,195)
    Other current assets                         (714,819)     (1,228,918)
    Rental and utility deposits                  (294,919)             --
    Accounts payable                             (105,908)        358,680
    Income and other tax payable                2,381,978         588,192
    Accrued salaries                               31,722        (136,233)
    Bills payable                              (6,545,846)        637,495
    Other current liabilities                    (304,617)       (815,346)
    Net cash (used in) provided by
     operating activities                     (12,429,252)      2,921,768

    Cash Flows from Continuing Investing
     Activities:
    Repayment from (Advance to) a former
     subsidiary - Shanghai Ritar                  789,933      (1,103,170)
    Purchase of property, plant and
     equipment                                 (1,184,092)     (1,140,133)
    Sales proceeds of disposal of
     property, plant and equipment                 11,868           4,390
    Payment of deposit for purchase of
     property, plant and equipment                (85,963)             --
    Net cash used in investing activities        (468,254)     (2,238,913)

    Cash Flows from Continuing Financing
     Activities:
    Proceeds from stock issued for
     warrants exercised                           259,810              --
    Proceeds from bank borrowings               5,860,720       3,091,483
    Repayment of bank borrowings               (5,063,296)     (4,592,848)
    Restricted cash                               824,592       1,043,812
    Net cash provided by (used in)
     financing activities                       1,881,826        (457,553)

    Cash Flows from Discontinued
     Operations Activities:
    Net cash used in discontinued
     operating activities                              --      (1,125,512)
    Net cash provided by discontinued
     investing activities                              --         (14,134)
    Net cash provided by discontinued
     financing activities                              --       1,103,170
    Effect of exchange rate changes on
     cash                                              --             293
    Change in cash from discontinued
     operations                                        --          36,183
    Net cash used in discontinued
     operations                                        --              --

    Effect of exchange rate changes                56,983        (177,086)

    Net (decrease) increase in cash and
     cash equivalents                         (10,958,697)         48,216
    Cash and cash equivalents, beginning
     of period                                 20,459,361       7,541,697
    Cash and cash equivalents, end of
     period                                    $9,500,664      $7,589,913

    Supplemental disclosure of cash flow
     information
    Cash paid for interest                       $286,574        $313,494
    Cash paid for income taxes                   $281,809        $544,409

    Non-cash investing and financing
     activities
    Issuance of common stock for cashless
     exercise of warrants                            $316             $--




SOURCE China Ritar Power Corp.